Tamil Nadu kickstarts process to regulate real estate sector

The Tamil Nadu government is likely to constitute a sub-committee to formulate rules for notifying the ambitious act eight days after the centre unveiled draft rules for the Real Estate Act 2016.TNN | July 03, 2016, 08:26 IST

CHENNAI: Builders may no longer be able to take homebuyers for a ride as the state government has kick started the process to ratify real estate act which will have provisions to set up a regulatory authority and penalise promoters delaying housing projects.

The Tamil Nadu government is likely to constitute a sub-committee to formulate rules for notifying the ambitious act eight days after the centre unveiled draft rules for the Real Estate (Regulation and Development) Act 2016.

State governments must frame rules to ratify the central act within six months after the act came into force on of May 1. The legislation aims at protecting the interests of buyers, stringent action against promoters delaying housing projects, single window clearance and establishing Real Estate Regulatory Authority to redress the grievances of consumers.

A high level meeting of top officials representing various bodies attached to the state housing and urban development department was convened on Saturday. The meeting discussed threadbare the recent draft rules of the union ministry of housing and urban poverty alleviation, official sources said. "The discussion was around the draft rules and provisions like establishing Real Estate Regulatory Authority. A sub-committee is likely to be formed for framing rules of the act," a senior housing official said.

Another official said, "We would be framing the rules by October 31". However, the Tamil Nadu government has not yet decided about the quantum of penalty to be levied on defaulting promoters.

The draft rules released by the Centre on June 24 says developers must pay 11.2 per cent interest to buyers for delay in handing over apartments and homes. Any violation like increase in the size of apartments, change in layout and construction of additional towers in a project without taking consent from 70per cent of the allottees can lead to cancellation of registration. Though the Centre's draft rules covers only five Union Territories without legislatures, states are at liberty to modify it or draw their own rules.

Meanwhile, CREDAI Chennai chapter chairman Suresh Krishn has sought the government to define the term "existing projects" and clear the air on date from which projects would come under the purview of the act.